Page 122 - IJPS-11-5

International Journal of
Population Studies Endowment insurance and family consumption in China

Endowment insurance also plays a critical role in risk pension frameworks and bolstering public confidence
mitigation and consumption smoothing. By guaranteeing in pension systems as a means of stimulating greater
a future income stream, it allows households to allocate consumer spending. The broader, transformative effects
resources more efficiently, thus reducing consumption of endowment insurance—including behavioral shifts in
volatility during economic downturns or personal financial savings and consumption, long-term improvements in
distress (Deaton, 1991). This ensures that households household welfare, and its role in risk mitigation—offer
can maintain a stable standard of living even in the face valuable lessons for other countries as well.
of unforeseen circumstances such as illness, job loss, or
other disruptions. As such, endowment insurance serves 5. Conclusion
as a vital financial tool for households seeking stability This study revealed a robust positive correlation between
in the face of uncertainty, fostering greater resilience in participation in endowment insurance and household
household financial behavior. consumption levels. Specifically, households with
While this study provides valuable insights into the insurance experience a 12.5% increase in consumption,
effects of endowment insurance on household consumption with a 1% rise in pension income correlating with a 0.4%
in China, several limitations must be acknowledged. First, increase in consumption. Further analysis underscores that
the use of fixed effects models enables the control of these effects are consistent across various demographic
unobserved individual-level heterogeneity through within- factors, including household registration type, regional
unit variation; however, this approach excludes time- development, and age. In particular, rural households,
invariant factors. Although these factors are undoubtedly residents of central regions, and individuals over 60 benefit
significant, they remain unaccounted for in the model, most from pension income. Robustness tests confirm that
potentially limiting the depth and comprehensiveness of participation in endowment insurance not only enhances
overall spending but also drives increased expenditures in
our findings. Furthermore, the presence of missing data key categories such as clothing, transportation, education,
and follow-up attrition may introduce biases that affect and entertainment, signaling a shift toward higher
the results. To mitigate these concerns, sample selection consumption standards. However, while pension receipts
methods and winsorization of continuous variables were tend to increase spending on clothing and healthcare, they
employed to address outliers, and multiple imputation are associated with reduced expenditures on housing and
techniques were applied to handle missing values. These other categories, suggesting a complex shift in consumption
strategies are designed to minimize bias and ensure the patterns.
integrity of the dataset. It is also important to note that
this study did not examine the potential effects of the In addition, the study highlights that institutional
COVID-19 pandemic on consumption patterns and insurance is linked to a 1.7% increase in consumption,
pension participation. The release of updated data will while commercial insurance, though associated with a 1.3%
provide an opportunity to explore these dynamics, offering decrease, lacks statistical significance. Finally, breakpoint
deeper insights into how household financial behavior regression analysis shows a reduction in consumption at
has evolved in response to the crisis. Future research the pension age, likely due to the recalculation of pensions
could benefit from comparative studies across different based on previous earnings, which leads individuals to
countries and longitudinal investigations, which would adjust their consumption downward.
enrich our understanding of the global implications of Acknowledgments
pension systems on consumption behavior. Such studies
could facilitate the identification of cross-national patterns None.
and trends, thus contributing to the broader literature on
pension systems and their impact on household economic Funding
decision-making. This paper was funded by the National Natural Science
This study carries important implications for Foundation of China (grant number 72272171).
policymakers, particularly in the context of China’s aging Conflict of interest
population and the rapid economic transformations it
is undergoing. The findings suggest that enhancing the The authors declare they have no competing interests.
predictability and reliability of pension systems could
significantly increase household consumption, a critical Author contributions
factor for sustaining economic growth. Policymakers Conceptualization: Lili Zheng
may therefore consider strengthening institutional Formal analysis: Lili Zheng, Ya Su

Volume 11 Issue 5 (2025) 116 https://doi.org/10.36922/ijps.4857